1. Islam
permits Muslim to save for the future consumption as Prophet’s injunction that:
“It is
better to leave after death some resources for one’s family than to leave them
destitute"
It uggests
that savings are desirable.
The
balancing rule is again at work in order to determine how much of the income to
consume and how much to save.
(Fahim, 1992: 173)
Allah
says:
“Those
who, when they spend, are not extravagant and not niggardly but hold a just
(balance) between those (extremes).
(Holy Quran: 25:67)
2. The
expected rate of return on savings, and not interest rate is the motivation for
savings in the Islamic framework.
As
Muslims are obliged to pay zakat out of their savings per annum, they have to
invest the money in order to get return or profit because zakat depleted
savings.
to be continued...
Source: Islamic Science University of Malaysia
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